How to Avoid Cheque Dishonour Due to Writing Errors

Cheque writing mistakes can cause cheque dishonour when the information on the cheque does not meet banking or payment requirements. Common errors include mismatched signatures, incorrect dates, overwriting, unclear figures or words, and discrepancies between the amount written in words and numbers. A cheque may also be returned if there are insufficient funds or if the account has restrictions. If a cheque issued for an EMI or other loan repayment is dishonoured, the payment may remain unpaid until the amount is received through another payment method. This can lead to overdue status and applicable charges, depending on the loan terms. Repeated or unresolved payment failures may also affect the borrower’s repayment record. To avoid such situations, borrowers should carefully check all cheque details before submission, maintain sufficient funds in the account, and track the payment status after the cheque is deposited. Timely action can help prevent avoidable payment delays and related consequences.

What are common cheque writing mistakes that cause dishonour?

A cheque may be dishonoured when it contains errors or does not meet the requirements for processing. Checking the cheque carefully before submission can help reduce the risk of payment failure.

• Signature mismatch: A signature that differs significantly from the specimen held by the bank may cause the cheque to be returned.
• Incorrect date: An incorrect, missing or invalid date can prevent the cheque from being processed.
• Overwriting or alterations: Unauthorised changes to the date, amount or other details may lead to dishonour. If a correction is required, issuing a fresh cheque is generally advisable.
• Mismatch in amount: The amount written in words and figures should be identical. Any discrepancy may cause the cheque to be returned.
• Insufficient funds: If the account does not have adequate funds to cover the cheque amount, the cheque may be dishonoured.
• Illegible details: Unclear handwriting or figures can create processing difficulties and may result in the cheque being returned.
• Incorrect payee details: Errors in the payee name or other required details can affect cheque processing.
• Damaged cheque: A torn, heavily damaged or otherwise unreadable cheque may not be accepted for clearing.

Reviewing these details before issuing a cheque can help reduce avoidable dishonour and payment delays. For loan or EMI payments, borrowers should also ensure the repayment is processed successfully and take prompt action if a cheque is returned.

Repeated cheque rejection can result in ongoing overdue amounts, applicable charges, and a potential impact on repayment history if the EMI remains unpaid. The effect depends on the reason for rejection, whether the EMI is subsequently paid, and the lender's applicable reporting and servicing processes. A rejected cheque should therefore be treated as a payment issue requiring prompt action, not as completion of the EMI payment.

Possible consequences include:

• EMI remains outstanding: A rejected cheque does not complete the EMI payment. The amount remains due until you make a successful payment.
• Applicable charges: Cheque dishonour or payment-related charges may apply according to the relevant loan terms.
• Repayment history impact: Continued delays in clearing EMIs may affect the borrower’s repayment history and may be reported to credit information companies as per applicable processes.
• Legal implications: Repeated cheque dishonour may have legal implications in certain circumstances. Section 138 of the Negotiable Instruments Act, 1881 may apply to specific cases involving a cheque issued towards a legally enforceable debt or liability, subject to statutory conditions and the prescribed process.
• Need for prompt action: The borrower should identify the reason for rejection and pay the outstanding EMI through an accepted payment method to avoid further delay.

A cheque error by itself should not be treated as proof of deliberate non-payment. The practical priority is to identify the return reason and ensure that the due EMI is addressed promptly.

What happens if the amount in words and figures do not match?

When the amount written in words differs from the amount written in figures, the bank may return the cheque unpaid because the payment instruction is inconsistent. For example, if the figures show 10,000 but the amount in words states 15,000, the bank may not process the cheque due to the discrepancy. Such an error can delay the intended payment and may result in the cheque being marked as dishonoured, depending on the circumstances and applicable banking procedures. If the cheque was issued towards an EMI or other loan repayment, the payment may remain outstanding until the correct amount is received through an accepted payment method. This could lead to overdue status and applicable charges under the loan terms. To avoid this issue, carefully verify that the amount in words and figures is identical before signing and submitting the cheque. If you notice an error, issuing a fresh cheque may help prevent processing issues.

How should you write a cheque to avoid EMI rejection?

Use this checklist before submission. Checking the cheque before submission can reduce avoidable errors that may delay an EMI payment. Use a permanent ink pen and write clearly so the cheque processes correctly. RBI guidance also recommends image-friendly coloured ink and permanent ink, but it has not prescribed a specific ink colour.

While handing over a cheque:

• Write the date correctly and check that it is valid for presentation.
• Enter the payee name accurately.
• Write the amount in both figures and words and ensure they agree.
• Avoid overwriting, corrections or alterations.
• Sign using the signature registered with your bank.
• Use permanent ink and write legibly.
• Check the cheque for tears, stains or other damage.
• Ensure sufficient funds are available in the account.
• Keep a record of the cheque number and payment details.

For cheques covered by the Positive Pay System, your bank may also require you to submit key cheque details for confirmation. RBI's Positive Pay framework allows banks to cross-check details such as the cheque date, payee name and amount against the cheque presented for clearing.

Can an overwritten cheque be dishonoured?

Yes, an overwritten or altered cheque may be dishonoured if the bank cannot accept the correction or the alteration is not properly authenticated. Changes to important details such as the date, payee name, amount in figures or amount in words can create uncertainty about the original payment instruction. Banks generally follow prescribed cheque-clearing and verification procedures, and they may return a cheque with unauthorised or unclear alterations unpaid. If the cheque was issued for an EMI or other loan repayment, dishonour can delay the payment and may result in overdue status and applicable charges under the loan terms. To reduce the risk of rejection, avoid making corrections or overwriting details on a cheque. If you make an error while writing the cheque, issuing a fresh cheque with accurate details is generally preferable. Before submitting it, carefully check the date, payee name, amount in words and figures, signature, and other details. This can help prevent avoidable processing issues and payment delays.